Three Issues in Law Department Talent Management

A key element to in a successful law department is management of in-house legal talent. By the term 'talent management,' we mean all the methods available to general counsel for training, mentoring, coaching, motivating and directing in-house lawyers. This article, the first in a series of three, is based on consulting projects and research Hildebrandt International has conducted with a number of leading law departments. This article will describe the top three issues law departments have with talent management, and more importantly, will show some of the techniques now employed by general counsel for coping with them. The second part of the series will describe three progressive practices in the arena of talent management, and the series will close with a foray into three controversial practices. Taken together, the series will survey law department talent management ' its major issues, newer practices and difficult decisions.

The Graying of Law Departments

The first issue is the phenomenon we refer to as the 'graying' of law departments. For several years, many law departments have remained approximately the same size, with their incumbent lawyers becoming more senior, yet doing essentially the same work. Aging law departments bring with them a set of challenges for talent managers. Senior lawyers are often very good in a certain field of law, performing legal tasks the way and at about the same level as they have for years. There's a comfort zone that they've achieved in their level of expertise, and unless challenged to become more efficient or learn new areas, the benefits derived from increasing compensation based on years of service diminish over time. It's particularly difficult because these lawyers see their peers in private practice earning increasingly higher levels of compensation as they move into senior partnership positions. The answer of many law departments is training their lawyers, investing in technological tools that increase their productivity, and using outside counsel more for commodity work. Just because they're senior doesn't mean that they aren't subject to some of the same kinds of training that many of the junior lawyers need for career development.

At a West Coast bank, training has been less of an issue than 'retooling' lawyers. The General Counsel's goal has been to keep all the lawyers busy through cross-training, and moving talent around where needed. 'I need a switch hitter.' Each year, that department has a one-day retreat that addresses critical training needs for everyone in the department. This year's focus was Sarbanes-Oxley.

At another department, every 18 months lawyers take part in a seminar that covers every state's bar requirements where the corporation conducts business. Internal and external speakers and teachers keep the content fresh and interesting. Beyond this, training is modularized with a senior administrative person dedicated to developing continuing legal-based training courses for the department. A high-tech company's law department also conducts internal seminars and uses PLI courses and materials extensively ' all on a fixed-cost basis.

A more dramatic response is to cap increases in base compensation. Some departments, such as a life insurance company in the Northeast, have created career competency models. If a lawyer does not demonstrate increased competency, the paycheck stays the same. At a well-known food company, the law department has created position descriptions that detail key accountabilities of the lawyers. At the same time, competency profiles establish clear expectations for what performance is to be delivered. In law departments with competency models, if lawyers show that they have increased their competency, then they become entitled to more compensation. Otherwise they can remain at the same pay level and continue to do the same work ' a declining standard of living after adjusting for inflation.

Empty Pockets and No Promotions

During a stretch of years where departments are not adding lawyers, where compensation budgets are squeezed, and where the senior lawyers do not choose to retire or move elsewhere, how can you motivate your talent without the carrot of extra pay and promotions? The answer for many General Counsel sounds like the comment of a West Coast GC: 'To keep lawyers interested in working at [our company], management is constantly looking for diversity in work and broadening the scope of the lawyer's expertise.'

Broadbanding is one effort to allow more flexibility in distributing the available compensation funds. A pharmaceutical company broadbanded its law department. They placed all their 80-plus lawyers in one of three compensation (and title) bands. That initiative provided the law department's managers with more flexibility to distribute available bonuses and compensation increases than the former system, which was based on multiple levels and titles. At an automotive company, only two bands of lawyers exist for compensation, and some people in the lower band can even make more than other lawyers in the upper band.

Whereas it used to be in vogue to reduce the number of titles in a department, there appears to be a trend now toward a proliferation of titles. If you can't pay someone more, at least you can adorn them with a fancier title. Unfortunately, if not done thoughtfully, with meaningful roles and responsibilities and corresponding compensation, the titles can confuse lawyers about their place in the department and how they should expect to advance their careers.

Research has shown that for many professionals, increased responsibility is its own reward. After layoffs, departments may decide to give the remaining lawyers more responsibility. In a telecom company's law department, if a lawyer leaves, the department first allocates that person's work to the remaining lawyers for 6 months or so to see if they can take on more responsibility. Underlying this idea is the notion of triage: Effective lawyers will decide on the priorities of all the tasks they could do, and choose those tasks that are most important or pressing.

Another talent management technique is training. If you can provide continuing legal education training for lawyers, they will grow professionally and feel compensated. What many law departments neglect, however, is to train their lawyers in skills other than knowledge of the substance of law. For example, several law departments have hired a consultant to help the lawyers with writing. For those who are interested in management, leadership training is available, as it is becoming more recognized that just because a lawyer is legally competent does not mean the lawyer is a competent manager.

At an engineering company's law department, lawyers are often given rotational assignments to various business units, to test and grow their talents and see if they fit in the business somewhere other than the legal department. According to the General Counsel, these tours of duty also help increase client satisfaction because they give lawyers exposure to the business. It also gives the business units confidence that the lawyers are on the same side and are trying to facilitate, rather than inhibit, business.

Whatever method is used to keep lawyers feeling adequately rewarded, when bonuses are available for the legal department, it is essential that they be distributed in a highly motivated and visibly fair way, consistent with the value created. At a financial company, the General Counsel strives to distribute 'every penny of the bonus pool available to him.' At the automotive company, annual General Counsel Awards allow some flexibility in recognizing exceptional efforts.

The Times They are A'Changin'

The third issue is helping people in the law department change and adapt to change. Change is inherent in all manifestations of talent management. Fundamentally, you are trying to move your staff toward becoming more cohesive and productive. Change may result from many drivers: A restructuring of the department, a new reporting pattern, the introduction of a document management system or even more progressive knowledge management.

One technique for helping people make changes rests on the array of psychometric tests. These paper and pencil tests, such as Myers-Briggs, Firo B, and the Insight Inventory, help people understand their own capabilities and areas for development, as well as those of their colleagues. The instruments tap into key aspects of personality and behavior in areas such as communication, problem solving, decision-making and interpersonal relations. They provide insights into how to become a more adaptable leader. A pharmaceutical company used one of these tests, the Kolbe Conative Test, as a key part of one of its lawyer retreats.

These three issues of talent management ' all arising from no-growth departments facing continual change in a down economy ' admit no easy solutions. However, law departments are grappling with them and have evolved a number of survival tools and techniques, recognizing that talent management is a key element to building and maintaining a world-class law department.

Rees Morrison, CMC has been consulting with law departments for 15 years, to help them manage themselves and their outside counsel better. A former practicing lawyer and the author of six books, he is a Director of Hildebrandt International. Beth Kellermann is a senior consultant based in Hildebrandt's San Francisco office.

A key element to in a successful law department is management of in-house legal talent. By the term 'talent management,' we mean all the methods available to general counsel for training, mentoring, coaching, motivating and directing in-house lawyers. This article, the first in a series of three, is based on consulting projects and research Hildebrandt International has conducted with a number of leading law departments. This article will describe the top three issues law departments have with talent management, and more importantly, will show some of the techniques now employed by general counsel for coping with them. The second part of the series will describe three progressive practices in the arena of talent management, and the series will close with a foray into three controversial practices. Taken together, the series will survey law department talent management ' its major issues, newer practices and difficult decisions.

The Graying of Law Departments

The first issue is the phenomenon we refer to as the 'graying' of law departments. For several years, many law departments have remained approximately the same size, with their incumbent lawyers becoming more senior, yet doing essentially the same work. Aging law departments bring with them a set of challenges for talent managers. Senior lawyers are often very good in a certain field of law, performing legal tasks the way and at about the same level as they have for years. There's a comfort zone that they've achieved in their level of expertise, and unless challenged to become more efficient or learn new areas, the benefits derived from increasing compensation based on years of service diminish over time. It's particularly difficult because these lawyers see their peers in private practice earning increasingly higher levels of compensation as they move into senior partnership positions. The answer of many law departments is training their lawyers, investing in technological tools that increase their productivity, and using outside counsel more for commodity work. Just because they're senior doesn't mean that they aren't subject to some of the same kinds of training that many of the junior lawyers need for career development.

At a West Coast bank, training has been less of an issue than 'retooling' lawyers. The General Counsel's goal has been to keep all the lawyers busy through cross-training, and moving talent around where needed. 'I need a switch hitter.' Each year, that department has a one-day retreat that addresses critical training needs for everyone in the department. This year's focus was Sarbanes-Oxley.

At another department, every 18 months lawyers take part in a seminar that covers every state's bar requirements where the corporation conducts business. Internal and external speakers and teachers keep the content fresh and interesting. Beyond this, training is modularized with a senior administrative person dedicated to developing continuing legal-based training courses for the department. A high-tech company's law department also conducts internal seminars and uses PLI courses and materials extensively ' all on a fixed-cost basis.

A more dramatic response is to cap increases in base compensation. Some departments, such as a life insurance company in the Northeast, have created career competency models. If a lawyer does not demonstrate increased competency, the paycheck stays the same. At a well-known food company, the law department has created position descriptions that detail key accountabilities of the lawyers. At the same time, competency profiles establish clear expectations for what performance is to be delivered. In law departments with competency models, if lawyers show that they have increased their competency, then they become entitled to more compensation. Otherwise they can remain at the same pay level and continue to do the same work ' a declining standard of living after adjusting for inflation.

Empty Pockets and No Promotions

During a stretch of years where departments are not adding lawyers, where compensation budgets are squeezed, and where the senior lawyers do not choose to retire or move elsewhere, how can you motivate your talent without the carrot of extra pay and promotions? The answer for many General Counsel sounds like the comment of a West Coast GC: 'To keep lawyers interested in working at [our company], management is constantly looking for diversity in work and broadening the scope of the lawyer's expertise.'

Broadbanding is one effort to allow more flexibility in distributing the available compensation funds. A pharmaceutical company broadbanded its law department. They placed all their 80-plus lawyers in one of three compensation (and title) bands. That initiative provided the law department's managers with more flexibility to distribute available bonuses and compensation increases than the former system, which was based on multiple levels and titles. At an automotive company, only two bands of lawyers exist for compensation, and some people in the lower band can even make more than other lawyers in the upper band.

Whereas it used to be in vogue to reduce the number of titles in a department, there appears to be a trend now toward a proliferation of titles. If you can't pay someone more, at least you can adorn them with a fancier title. Unfortunately, if not done thoughtfully, with meaningful roles and responsibilities and corresponding compensation, the titles can confuse lawyers about their place in the department and how they should expect to advance their careers.

Research has shown that for many professionals, increased responsibility is its own reward. After layoffs, departments may decide to give the remaining lawyers more responsibility. In a telecom company's law department, if a lawyer leaves, the department first allocates that person's work to the remaining lawyers for 6 months or so to see if they can take on more responsibility. Underlying this idea is the notion of triage: Effective lawyers will decide on the priorities of all the tasks they could do, and choose those tasks that are most important or pressing.

Another talent management technique is training. If you can provide continuing legal education training for lawyers, they will grow professionally and feel compensated. What many law departments neglect, however, is to train their lawyers in skills other than knowledge of the substance of law. For example, several law departments have hired a consultant to help the lawyers with writing. For those who are interested in management, leadership training is available, as it is becoming more recognized that just because a lawyer is legally competent does not mean the lawyer is a competent manager.

At an engineering company's law department, lawyers are often given rotational assignments to various business units, to test and grow their talents and see if they fit in the business somewhere other than the legal department. According to the General Counsel, these tours of duty also help increase client satisfaction because they give lawyers exposure to the business. It also gives the business units confidence that the lawyers are on the same side and are trying to facilitate, rather than inhibit, business.

Whatever method is used to keep lawyers feeling adequately rewarded, when bonuses are available for the legal department, it is essential that they be distributed in a highly motivated and visibly fair way, consistent with the value created. At a financial company, the General Counsel strives to distribute 'every penny of the bonus pool available to him.' At the automotive company, annual General Counsel Awards allow some flexibility in recognizing exceptional efforts.

The Times They are A'Changin'

The third issue is helping people in the law department change and adapt to change. Change is inherent in all manifestations of talent management. Fundamentally, you are trying to move your staff toward becoming more cohesive and productive. Change may result from many drivers: A restructuring of the department, a new reporting pattern, the introduction of a document management system or even more progressive knowledge management.

One technique for helping people make changes rests on the array of psychometric tests. These paper and pencil tests, such as Myers-Briggs, Firo B, and the Insight Inventory, help people understand their own capabilities and areas for development, as well as those of their colleagues. The instruments tap into key aspects of personality and behavior in areas such as communication, problem solving, decision-making and interpersonal relations. They provide insights into how to become a more adaptable leader. A pharmaceutical company used one of these tests, the Kolbe Conative Test, as a key part of one of its lawyer retreats.

These three issues of talent management ' all arising from no-growth departments facing continual change in a down economy ' admit no easy solutions. However, law departments are grappling with them and have evolved a number of survival tools and techniques, recognizing that talent management is a key element to building and maintaining a world-class law department.

Rees Morrison, CMC has been consulting with law departments for 15 years, to help them manage themselves and their outside counsel better. A former practicing lawyer and the author of six books, he is a Director of Hildebrandt International. Beth Kellermann is a senior consultant based in Hildebrandt's San Francisco office.